We have generated and functionally characterized dominant negative core protein variants of the hepadnaviruses to determine their effects on "wild type" viral replication. Plasmids expressing these constructs were introduced into hepatoma cell lines by transient transfection and effects on wild type woodchuck hepatitis virus (WHV) and hepatitis B virus (HBV) replication were evaluated by Southern blot analysis of purified viral core particles. WHV and HBV constructs expressing a truncated core protein fused in frame with the C-terminus of the small surface protein were found to inhibit viral replication by 90-95% due to disruption of the viral nucleocapsid assembly process and preventing encapsidation of pregenomic RNA. The antiviral effects were found to be specific for the targeted virus. These results demonstrate that mutants of hepadnaviral core protein may represent a novel class of antiviral agents.